NIBE Industrier AB (publ)

Q2 sales were SEK 10.7 billion, up from SEK 10.1 billion a year ago. Climate Solutions sales were SEK 7.3 billion versus SEK 6.8 billion, with organic growth of 9% excluding currency; Element sales were SEK 3.1 billion versus SEK 2.8 billion, with organic growth of 11.6%; and Stoves sales were SEK 686 million versus SEK 678 million, with organic growth of 1.8%. Climate Solutions operating margin was 13.8%, Element operating margin was close to 9%, and Stoves remained loss-making. Management said the group’s underlying organic growth was around 9% after stripping out currency effects, and that rolling 12-month operating margin for Climate Solutions was 13.6%, Element was 7.7%, and Stoves was 4.3%. Cash flow in Q2 was close to SEK 800 million, up from minus SEK 100 million a year ago, and net debt to EBITDA was 2.65x. No explicit full-year revenue or EPS guidance was given; the main forward commentary was that Climate Solutions should remain within its 13% to 15% margin range, Element should stay within 6% to 8% for the full year, and net debt should come down toward about 2.0x to 2.1x by year-end.

Gerteric Lindquist framed the quarter as evidence that NIBE is now in a sustained improvement phase, pointing to stronger revenue, higher profits, better margins, and disciplined cost control. He emphasized that the company’s large investment program is largely complete, the new facilities are boosting productivity, and product launches around better refrigerants, intelligent controls, and air-to-air offerings are resonating. His tone was upbeat but cautious, especially on Stoves and tariffs, where he said management is waiting to see whether U.S.-Canada negotiations ease the situation.

Hans Backman focused on the numbers behind the margin improvement: Climate Solutions sales rose to SEK 7.3 billion and profit increased by about 20%, with currency-adjusted margin improvement of slightly more than 23%; Element sales rose to more than SEK 3.1 billion and profit increased by 50%; and Stoves had a much smaller loss as gross margin improved. He said working capital is elevated mainly because inventories are being built for the second half, non-interest-bearing current liabilities moved up due to receivables timing and normal payables behavior, and capex has fallen to roughly SEK 330 million from about SEK 480 million as the major investment cycle ends. He also noted Q2 operating cash flow of close to SEK 800 million, up from minus SEK 100 million, and said the bond issuance was oversubscribed, supporting a balance sheet that he expects will reduce leverage further this year.

Analysts pressed on working capital, with one asking about the sharp rise in non-interest-bearing current liabilities and whether it reflected structural changes; management said there were no major one-off effects, only normal receivables timing and the deliberate inventory build for the second half. On M&A, management said NIBE is again looking at larger acquisitions after being cautious following the peak-cycle deal in 2023, but remains disciplined and does not want to overburden the balance sheet. Questions also focused on Climate Solutions margin sustainability, U.S. heat pump demand after tax credits were removed, and the new air-to-air launch; management said U.S. residential demand fell less than feared, the air-to-air products are launching this fall, and Climate Solutions guidance remains 13% to 15% rather than a higher medium-term target.